Commonwealth Consolidated Acts

TAXATION LAWS AMENDMENT ACT (NO. 4) 2003 - SCHEDULE 4

Income Tax Assessment Act 1997

1   Subsection 65 - 25(2) (table item   1A)

Repeal the item, substitute:

2   Subsections 67 - 25(1) to (1C)

Repeal the subsections, substitute:

Franked distributions

  (1)   * Tax offsets available under Division   207 (which sets out the effects of receiving a * franked distribution) or Subdivision   210 - H (which sets out the effects of receiving a * distribution * franked with a venture capital credit) are subject to the refundable tax offset rules, unless otherwise stated in this section.

  (1A)   Where the trustee of a * non - complying superannuation fund or a * non - complying ADF is entitled to a * tax offset under Division   207 because a * franked distribution is made to, or * flows indirectly to, the trustee, the tax offset is not subject to the refundable tax offset rules.

  (1B)   Where:

  (a)   a trustee is entitled to a * tax offset under Division   207 because a * franked distribution * flows indirectly to the trustee in circumstances described in subsection 207 - 35(4) (which deals with trustees who are liable to be assessed on the net income of a trust under section   98, 99 or 99A of the Income Tax Assessment Act 1936 ); and

  (b)   the trustee is liable to be assessed under section   98 or 99A of the Income Tax Assessment Act 1936 on a share of the net income of the trust estate that is, in whole or in part, attributable to the distribution;

the tax offset is not subject to the refundable tax offset rules.

  (1C)   Where a * corporate tax entity is entitled to a * tax offset under Division   207 because a * franked distribution is made to the entity, the tax offset is not subject to the refundable tax offset rules unless:

  (a)   the entity is an * exempt institution that is eligible for a refund; or

  (b)   the entity is a * life insurance company and the * membership interest on which the distribution was made was not held by the company on behalf of its shareholders at any time during the period:

  (i)   starting at the beginning of the income year of the company in which the distribution is made; and

  (ii)   ending when the distribution is made.

  (1D)   Where a * corporate tax entity is entitled to a * tax offset under Division   207 because a * franked distribution * flows indirectly to the entity, the tax offset is not subject to the refundable tax offset rules unless:

  (a)   the entity is an * exempt institution that is eligible for a refund; or

  (b)   the entity is a * life insurance company and the company's interest in the * membership interest on which the distribution was made was not held by the company on behalf of its shareholders at any time during the period:

  (i)   starting at the beginning of the income year of the company in which the distribution is made; and

  (ii)   ending when the distribution is made.

  (1E)   Where a * corporate tax entity is entitled to a * tax offset under Subdivision   210 - H because a * distribution * franked with a venture capital credit is made to the entity, the tax offset is not subject to the refundable tax offset rules unless:

  (a)   the entity is a * life insurance company; and

  (b)   the * membership interest on which the distribution was made was not held by the company on behalf of its shareholders at any time during the period:

  (i)   starting at the beginning of the income year of the company in which the distribution is made; and

  (ii)   ending when the distribution is made.

3   Subsection 67 - 25(2)

After "under Subdivision   61 - H", insert ", except those arising under subsection 61 - 335(4),".

4   At the end of subsection 67 - 25(2)

Add:

Note:   Subsection 61 - 335(4) deals with tax offsets for trustees who are assessed and liable to pay tax under section   98 of the Income Tax Assessment Act 1936 .

5   Application

(1)   The amendment made by item   1 of this Schedule applies to tax offsets arising because of events that occur on or after 1   July 2000.

(2)   The amendment made by item   2 of this Schedule applies to tax offsets arising because of events that occur on or after 1   July 2002.

(3)   The amendments made by items   3 and 4 of this Schedule apply to tax offsets arising because of premiums, or amounts in respect of premiums, paid on or after 1   July 2002.